Mailbag - Why NZ isn't Sweden + a reading list

Answering questions from readers on New Zealand's lack of Ikeas and a good reading list for getting into NZ politics.

This is a screenshot from little known television show Succession.

Good morning! A bit of a different one today as I answer a few of the reader questions sent in since my last note.

If you have any other questions I’ll do another mailbag at some point soon, pop me a reply to this email or leave a comment. Questions have been edited for length.

Reader Adam asks: Why would it be so hard for NZ to become more of a welfare state like Sweden? (i.e. much higher taxes, excellent public infrastructure (healthcare for example) and much stronger social welfare net)?

Adam actually proposed several compelling answers to this in his full question, including our ethnic diversity and colonial history.

Obviously there is no simple reason why New Zealand is nowhere near as much of a welfare state as the Nordic nations. History is contingent. As a non-expert on this topic, I do think there are a few factors that are likely to have played a large part. And this could all change soon - we’re getting an Ikea any year now.

One - The Anglosphere and the tyranny of distance. We share some similarities with the Nordic nations - beautiful mountains, smallish populations, and a constitutional monarchy.

But the roots of our politics are linked to other countries that speak English, particularly our former colonial masters in the United Kingdom. While it eventually diverged, the foundations of our constitutional order were built on that of Westminster and Whitehall, with a first past the post electoral system, a two-chambered but very powerful Parliament, and permanent expert bureaucrats who served whichever group of MPs commanded the confidence of said Parliament. Even as we diverged from the UK (getting rid of an upper chamber and introducing proportional representation) we did so fairly recently, and our politicians and political system all remained in conversation with their English-speaking peers around the world. The people who shifted the country’s economy firmly to the right in the 1980s and 1990s were reading English-language economists from the Chicago school and watching what was happening in the UK, US, and Australia, as were journalists and opinion-makers. This is not a slam dunk of an explanation, but I do think it goes some way to explaining things - many Kiwis naturally feel we share a culture with the UK, if not the US too, and this bleeds into our political imagination. I think of myself as fairly worldly myself but I know far more about the political system in the US and UK than any non-English speaking country.

On the flipside of this, the Nordic countries were clearly influencing each other. They are all in the same side of the world and many (but not all!) of the languages are mutually understandable with a bit of work. It makes sense that these countries would all therefore be able to influence each other very greatly without influencing a set of islands on the other side of the world.

Two - A different relationship between capital and labour. While we’re on location, it’s probably worth mentioning that much of that social democracy was locked in during the 1930s, when Soviet Russia was right beside the Nordic nations and winning over the hearts and minds of many in the left around the world, despite a whole lot of show trials and famine. This isn’t to say that these countries all decided to just pick up a book of Lenin’s and proclaim forever revolution, but more that the competition to capitalism seemed very real at the time, making it crucial to spread prosperity far and wide. Now, you can argue (many do!) that this influenced social democracy all over the world, but I think it is likely that it had a particular effect on these nations.

One of the crucial aspects of the so-called ‘Nordic model’ relates to employment relations, what some people call a “great bargain” between capital and labour. These countries have unionisation rates far greater than New Zealand (and much of the rest of the world). These unions retain a much greater role, often taking seats on a company board and providing unemployment insurance and the like. A tripartite bargaining system between the unions, businesses, and national governments appears to keep everyone fairly happy, with wages rising steadily but not wildly, and strikes rare. From what I saw in Denmark when I visited, there is actually more flexibility for employers - they are able to let go of workers fairly easily as the state is confident that anyone unemployed will be looked after well by this insurance and a new job found soon. This is called “flexicurity” - businesses get flexible employment practices, but workers retain economic security. Supposedly.

Three - Electoral law. Now, New Zealand did used to have much higher unionisation rates and big nationalised collective bargaining, which the Government is trying to bring back with Fair Pay Agreements. The neoliberal turn in the 1980s/1990s put paid to that, alongside our general shift into becoming a services economy. From what I can tell there was a rightward turn in some Nordic nations around the same time, but a far less drastic one. So why was our swing so much stronger? I would think the fact that we were still ruled by FPP governments able to enact major reform unilaterally probably had something to do with it. Our experience of the oil shock in the 1970s was also probably quite different than the resource-rich Nordic nations. But really, if this rambling answer hasn’t made this clear enough, I have no idea.

Reader George asks: I’m getting into NZ politics but am still something of a rookie, how can I get started/what would be good to read to help me understand NZ politics better?

Welcome to our sad little world.

My first post on this Substack was an attempt to start answering this question - basically a guide to the rhythms that dictate political life. But you’re after a much more substantial reading list than that.

Unfortunately, New Zealand does not have a good ur-text of political history any more. I remember flicking through Leslie Lipson’s Politics of Equality in university - which was sold as kind of the founding text of NZ political science - but I don’t remember any insights from it. The books I read at university that did stick with me was Geoffrey and Matthew Palmer’s Bridled Power and Richard Mulgan’s Politics in New Zealand but these are more wide-ranging reference guides than narrative history.

Instead of wide-ranging history we do have some very good memoirs and books by journalists that I have found very useful for taking me back to specific times. By themselves these books won’t give you everything - but they will give you small islands of understanding to stand on while you look around at the wider chaotic ocean of the past.

The memoirs include:

• Marilyn Waring’s The Political Years is a fantastic account 1975-1984 political career, right from the selection panel in Raglan through her being outed by the media to her essentially bringing down the Muldoon Government. She kept really detailed notes and it shows.

• David Lange’s My Life is a bracingly self-centred and omission-heavy account of the 1980s, where the Prime Minister casts himself as some kind of side character carried away by events. It is also deeply funny and does give you some insight into his thinking. I haven’t read Michael Bassett’s book on him (or his wider book on prime ministers) but I’ve heard good things.

• Christopher Finlayson’s Yes Minister is another deeply funny account of the Key Government. It’s not the definitive book on that Government or anything (that would come, in my opinion, from Bill English or perhaps Wayne Eagleson), but it is a great insight into what it felt like on the semi-inside. The Judith Collins and Simon Bridges books also attempt to do this a bit but because both MPs wrote them when they still wanted to be prime minister one day there is some electioneering which spoils things.

The journalism books include:

• Jane Clifton’s Political Animals is a very funny series of essays about characters around Parliament.

• Andrea Vance’s Blue Blood is a brutal and well-sourced look at the recent bad years for the National Party.

• Nicky Hager’s Hollow Men. This book about the inside of the National Party pisses a lot of the subjects off to this day, and there’s no question that Hager’s reporting style is not something you’d want as the only format of news journalism. But the facts in this book have never to my knowledge been serious challenged or proven wrong - and you have to remember that someone in the party did decide to leak him the material.

If you want an understanding of history a bit further back Barry Gustafson’s book on Michael Joseph Savage or his book on the National Party are good places to start. If you want a good idea of New Zealand’s history, not just its political history, I adore the two James Belich books. And if you don’t feel like reading the Campaign documentary about the Wellington Central seat in the 1996 election is free online and is probably our most beloved political film¹.

Readers - would you like to suggest any other books for George? Let him know in the comments. Until next time.

1. The TV series Revolution is also free online and is a good primer on the 1980s and early 1990s.